The government announced yesterday that it had agreed to sell Northern Rock plc to Virgin Money for £747m. The Northern Rock Foundation, which supports organisations tackling disadvantage in north-east England and Cumbria, is supported by Northern Rock with 1 per cent of its pre-tax profits.
This is a two-year rolling agreement from January 2011, to be reviewed annually. Virgin Money said yesterday that it would extend this agreement for the foundation, which last year gave out almost £12m in grants, to the end of 2013.
A spokesman for Virgin Money said that this would give it time to agree with the foundation how they will work together in the future.
"We’ve invested millions in launching Virgin Money Giving," he said. "We’re an organisation that wants to give something back, so we have extended the commitment and we can assume nothing more until we have spoken to them about it."
Alastair Balls, chair of the foundation, said he hoped its work would have an "enduring and expanding role".
"We had an initial discussion about the relationship that the foundation and Virgin Money Giving might have in future," he said. "We are both committed to exploring ideas further and seeking to establish an ongoing relationship."
Jo Curry, chief executive of Voluntary Organisations’ Network North East, said that without the foundation the future would be bleak for many local charities and voluntary groups.
"Earlier this year, Virgin Money was quoted as saying the work of the Northern Rock Foundation to support good causes was ‘significant’ and that ‘any buyer needs to ensure that work continues’," she said. "We do hope that this year of extended support is the first phase in a continuing relationship."